Question

In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $50 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Suppose the deferred portion of the rent collected was $40 million at the end of 2022. Taxable income is $200 million. Prepare the appropriate journal entry to record income taxes in 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Answer 1

А в 2 5 Date Particulars Debit($) Credit($) 3 December 31,2022 Income tax expense 52.5 Deferred tax liability/Deferred tax asset(reversal)[10*25%] Income tax payable (200*25%) 50 6 7 Out of deferred revenue 50-40 = $10 million is earned during the year 2022 8 9 Accounting income will be higher by amount of deferred revenue earned in 2022 which is equals to 200 +10 = 210 10

A B C D Credit($) Date December 31,2022 Debit($) =D5+D4 Particulars Income tax expense Deferred tax liability/Deferred tax asset(reversal)[10*25% Income tax payable (200*25% =10*25% =200*25%